Smorgasbord of health items in massive 2-year budget deal

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Dive Brief:

After a few tense hours early Friday, Congress passed and the president signed a wide-ranging, two-year budget deal that also extends government funding through March 23, staving off an extended shutdown.

The bill has a variety of health policy implications, including a delay to Disproportionate Share Hospital payment cuts, a repeal of the board some labeled a “death panel” during debate over the Affordable Care Act and funding to fight the opioid crisis. Also included are technical changes to the Medicare Access and CHIP Reauthorization Act of 2015 aimed at smoothing the transition to the new Quality Payment Program.

The agreement does not include reinsurance or cost-sharing reduction payment funds, which some lawmakers pursued in an effort to stabilize ACA exchange markets.

Dive Insight:

The massive legislation raises spending caps on domestic and military spending by about $300 billion and pushes the federal debt limit to March 2019. A variety of Congressional Budget Office estimates predict the deal will add almost $420 billion to deficits over the next decade once interest is accounted for, according to the Committee for a Responsible Federal Budget. Now Congress will move to the appropriations process.

Key healthcare provisions in the budget deal include:

Repeals the ACA’s Independent Payment Advisory Board

The IPAB, created by the ACA, was an independent board that could make reductions in Medicare payments to providers if overall spending grew faster than a set rate. The panel has never convened and has not been used to reduce Medicare spending.

The board was never popular among Republicans and even among certain Democrats. Senate Finance Ranking Member Ron Wyden (D-Ore.) acknowledged that the repeal “garnered bipartisan support, showing that many Democrats have joined Republicans in recognizing just how ill-advised the creation of this panel really was.”

Drugmakers also never liked the board, in part because one of its purposes in theory was to limit spending on drugs. The American Medical Association praised the move.

Delays Disproportionate Share Hospital payment cuts

The bill also stalls cuts to Medicaid payments for hospitals that serve a high proportion of low-income patients until 2020.

The American Hospital Association praised the deal, saying that the delay in cuts to DSH payments would help health systems care for children, the poor, the disabled and the elderly.

“This delay will help ensure that hospitals can continue to deliver high-quality care for their patients. We also are encouraged that the bill extends critical rural programs — including the Medicare-dependent Hospital program, the enhanced Low-volume Adjustment program, and the ambulance add-on payment program — that help keep vital care and service in rural America,” said Rick Pollack, president and CEO of AHA, in a statement.

Meaningful use standards

The bill also contains elements of the Health Information Technology for Economic and Clinical Health Act, removing a mandate that meaningful use standards begin to be more stringent over time. The section aims to reduce "future electronic health record-related significant hardship requests," according to House Energy & Commerce Committee Chairman Greg Walden (R-Ore.). The bill also repeals the Medicare payment cap for therapy services.

"We applaud the provisions in the bill that repeal the Medicare payment caps for outpatient therapy services, give hospitals more flexibility on meaningfuluse and increase the availability of telehealth services. The bill also supports chronic care management, including policies that advance team-based care, expand innovation and technology, empower individuals and care givers in care delivery and allow patients to receive more care in their homes," Pollack said.

Closes the Medicare Part D “donut hole” a year early

The Senate budget bill calls for an accelerated close of the so-called Medicare Part D donut hole. The change would also increase the discount that pharmaceutical companies would pay to individuals who fall in a coverage gap from the current 50% cost of the applicable drug to 70% starting in 2019 instead of 2020.

The drug lobbies slammed the change. Pharmaceutical Research and Manufacturers of America CEO Stephen Ubl pointed to an Avalere estimate that the change would save Part D insurance plans $40 billion, adding that Congress should instead use the savings to give seniors an out-of-pocket cap and access to discounts at pharmacies.

“While we support making out of pocket costs for Part D beneficiaries more affordable, the vast majority of savings from this proposal will accrue to the insurance companies that sponsor Part D plans, rather than patients,” said Jim Greenwood, Biotechnology Innovation Organization president and CEO, in a statement.

Provides more opioid funding

Critics have frequently criticized the federal government’s response to the opioid epidemic, saying that more funding is needed to stem the tide of a crisis that has claimed the lives of thousands of Americans.

The bill also contains $2 billion in additional funding for research projects at the National Institutes of Health, $4 billion for Veterans Affairs to invest in VA hospitals and clinics, $7 billion for Community Health Centers and almost $500 million for the National Health Service Corps.

Extends the Children’s Health Insurance Program

The bill takes advantage of the savings the Congressional Budget Office scored for CHIP by extending the program for four additional years through 2027. Congress had initially extended the program for six years.

The move was praised by a variety of stakeholders, including AMA, AHA and lawmakers.

Next steps

The blockbuster deal gives Congress six weeks to figure out how to hash out an appropriations deal.

“This bill does not conclude the serious work that remains before Congress. After we pass it, the Appropriations Committees will have six weeks to negotiate detailed appropriations and deliver full funding for the remainder of fiscal year 2018,” McConnell said on the Senate floor Wednesday.

House Appropriations Committee Chairman Rodney Frelinghuysen (R-N.J.) said the deal will enable work on the 12 annual appropriations bills to begin. “I look forward to working with our Senate counterparts to quickly negotiate and complete all 12 full-year Appropriations bills ahead of the March 23 deadline,” Frelinghuysen said in a statement.